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Oil falls to near $100 in Asia after S&P warns of Europe debt downgrades
SINGAPORE (AP) ' Oil prices fell to near $100 a barrel Tuesday in Asia after a U.S. credit rating agency warned it may cut the debt ratings of 15 eurozone countries.
Benchmark crude for January delivery was down 50 cents to $100.49 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose 3 cents to settle at $100.99 on Monday.
In London, Brent crude was down 60 cents at $109.21 on the ICE futures exchange.
Standard and Poor's said late Monday it was reviewing "with negative implications" its long-term sovereign credit ratings of European countries including Germany, France and Austria.
"Systemic stresses in the eurozone have risen in recent weeks to the extent that they now put downward pressure on the credit standing of the eurozone as a whole," S&P said.
Crude had risen earlier Monday amid investor optimism that a proposal by French and German leaders of tough new measures that would keep eurozone members from overspending may lower debt levels and restore confidence.
Crude has jumped from $75 a barrel since October on signs the U.S. economy is improving. However, analysts expect a recession in Europe will undermine global crude demand.
"The evolving dichotomy between an unexpectedly strong U.S. economy and the increasing likelihood of a eurozone recession" will likely support U.S. benchmark crude prices and weigh on Brent.
In other Nymex trading, natural gas fell 0.7 cents at $3.45 per 1,000 cubic feet. Heating oil slid 0.7 cents to $2.99 a gallon and gasoline futures dropped 0.7 cents to $2.60 a gallon.